TL;DR
Decentralized trading protocol, Pancakeswap is known for automating the transaction of DeFi tokens via automated trading. Pancakeswap utilizes an automated market maker protocol in order to facilitate these trades. Pancakeswap launched in 2020 as a cloned Uniswap built on top of a different blockchain, BNB Smart Chain.
Its goal is to continue the development of its exchange and to keep trading automated and allowing anyone with tokens to be able to trade on its platform. It seeks to improve its efficiency in trading when compared to traditional exchanges. It also wants to improve on additional features not present on Uniswap, including higher rewards for network participants.
CAKE is Pancake's in house token. Traders who participate in the Pancakeswap ecosystem either through liquidity providing or other forms are rewarded with CAKE tokens. CAKE also serves as Pancakeswap's governance token. Holders of this token can take part of the decision making process for Pancakeswap.
Introduction
Pancakeswap is a platform that runs on the BNB Smart Chain and enables users to directly swap tokens. By holding the native token of the platform, CAKE, you can suggest changes to how it operates, and vote on other users' proposals. The platform was created in 2020 by an anonymous group of developers who apparently had a love for pancakes. They copyied Uniswap's open-source code.
Pancakeswap gained significant traction and popularity in 2021 due to the surge in popularity of defi and token trading. Pancakeswap is a decentralized exchange, meaning traders can trade tokens for other tokens on its platform. The fees incurred by a trader are paid towards liquidity providers.
For the purpose of creating liquidity, Defi offers trading for many popular tokens. It is an exchange that provides value for the Defi sphere. The other important aspect of this decentralized exchange is that users can only trade BEP-20 tokens, as it is primarily a BNB Smart Chain based exchange.
What Is Pancakeswap?
Pancakeswap is a decentralized exchange based on BNB Smart Chain that lets traders swap any two BEP-20 token. In the Defi space, this is one of the more popular platforms. In decentralized exchanges, there is a lack of liquidity that sours the experience. Pancakeswap aims to alleviate this issue. In order to accomplish this, it allows users to swap tokens, thus the platform does not rely heavily on buyers and sellers creating liquidity.
Unlike traditional exchanges that use middlemen and custodians, Pancakeswap operates in a decentralized and trustless way. This is done through automated liquidity protocols. Unlike traditional exchanges, there is no order book or central authority facilitating trades.
Over the years, the exchange has gained in popularity and is one of the most popular DEXs, based on volume traded.
What Coins are on Pancakeswap?
There are around 1,400 tokens available to trade on Pancakeswap's platform, including most of the leading DeFi tokens such as ATOM, BNB, FLOKI INU, and the rival DEX token UNI.
What are Pancakeswap's Fees?
Pancakeswap has a number of fees for its users:
Trading fees: Pancakeswap charges a flat 0.25% fee for trading on the exchange. The breakdown for this fee is as follows: 0.17% returned to pool in the form of rewards to Liquidity Providers, 0.03% are sent to Pancakeswap's treasury, 0.05% are sent towards CAKE buyback and burn.
Withdrawal fees: At the time of writing, there are no withdrawal fees charged on Pancakeswap.
How To Use Pancakeswap?
Given that it’s built on Pancakeswap’s source code, Pancakeswap is just as minimally designed and easy to use, with a simple, clean interface. Swapping tokens is simplicity itself, as is the option to add to liquidity pools.
Pancakeswap does not require KYC verification, so beginners don't have to worry about providing proof of identity. Here are some things you can do on Pancakeswap:
Swap Tokens
You can swap tokens by connecting a wallet, such as MetaMask as shown below. The connect option should be at the top right hand corner.
Once connected, select "trade" on the menu, then select "swap" as shown in the image down below.
Now you can select which two assets you want to exchange, and the amount you wish to trade.
Liquidity Providing
To provide liquidity to this exchange navigate over to the "Trade" tab on the menu. Hover over it and select "Liquidity".
Once selected you can go ahead and add any two tokens to a pool. You will get a percentage of the transaction fees that is proportional to the amount you have in that pool.
Staking LP Tokens On Pancake Swap
To stake you LP tokens head over to "Earn" on the menu and click on"Farms".
Next, you will be directed to the page below. Select the pool for your LP tokens.
Since, we added liquidity on the CAKE-BNB pool we will select that pool to stake out LP tokens. Select it then connect to your wallet. You will be asked the amount of LP tokens you would like to stake. Once you do pay the associated fees.
Due to its decentralized nature, many projects launch directly on Pancakeswap, giving users access to a wide range of tokens. As a result of its decentralized nature, anyone can list fake coins, misleading inexperienced users into exchanging assets for worthless, sham tokens.
CAKE's Tokenomics
Cake is Pancakeswap's governance token. Cake has a circulating supply of 150 million+ tokens with a max supply of 750 million. Thus, it has around 20% of max supply in circulation.
How To Buy CAKE?
You can buy CAKE on Binance.
Log In/ Create An Account
If you haven’t done so already you can create an account with Biannce. Keep in mind Binance is a KYC platform so you need to provide some form of ID. If you have an account already you can just log in.
Search For CAKE
Once logged in click on trade and search for "CAKE" in the search box.
Select Amount and Buy
Once you find the token select the amount you want to purchase and select confirm the order.
Final Thoughts
Pancakeswap is an Ethereum based decentralized exchange. Traders can utilize the platform to trade any BEP-20 token. As such, traders have much more freedom and control over there crypto trading experience.
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